BBN Bureau
FY22 revenue likely to grow 10 pc
KOCHI/March 22-2022: The pandemic seems to have had only limited impact on Jos Alukkas Group’s performance as it staged a smart show for the financial year 2020-21 (FY21).
The prominent retail gold jewellery network has posted 120 per cent growth in its net profit for the financial year growing to Rs307.3 crore in FY21 from Rs139.5 crore in the previous year.
However, the operating income during the period dropped 2 per cent from Rs6716.3 crore in the financial year 2019-20 to Rs6581.5 crore in 2020-21.
The good show by the group has been possible, according to the leading rating agency ICRA, due to a strong market position in the southern states and the diversification initiatives taken up by the group.
The company has 47 stores and commands a strong market position in Tamil Nadu, Kerala and Karnataka (cumulatively contributing approximately 90 per cent to sales), which supported its revenues over the years.
Recovery in H2
The agency believes that despite the pandemic-induced business disruptions witnessed in H1 FY2021, the Group’s revenues and earnings improved in FY2021, supported by the recovery in demand conditions in the second half and a healthy increase in gold prices.
Thus, the Group registered only a marginal revenue decline of 2 per cent in the fiscal to Rs6581.5 crore, against a 39 per cent decline witnessed in H1 FY2021.
“Favourable gold prices resulting in inventory gains, and cost control measures helped improve the operating margin to rise to 7.1 per cent in FY2021 from 3.5 per cent in the previous fiscal, in line with the healthy demand witnessed post the second wave of the pandemic,” said ICRA.
Eyes 10 pc revenue growth in FY22
The Jos Alukkas Group is expected to register a revenue growth of more than 10 per cent in FY2022. Growth over the medium term would be supported by the on-going store expansion as well as opportunities presented by a large share of unorganised players in the industry.
The agency says the Group’s operating margins are likely to stabilise at around 4 per cent over the medium term. Key credit metrics including the interest coverage and total outside liabilities to the tangible net worth (TOL/TNW) improved to around 9 times and 0.9 times, respectively in FY2021, and are expected to remain comfortable at around 6 times and 0.8 times, respectively in the current fiscal.
